e: Pt= price per share at the end of time period t, and Dt= cash distributions received during time period t.
Example:A stock is currently worth $60. If you purchased the stock exactly one year ago for $50 and received a $2 dividend over the course of the year, what is your HPR?
(60 - 50 + 2) / 50 = 24%
f: Define and explain the use of intervals to summarize data.
An intervalis the set of return values within which an observation falls. Each observation falls into only one interval, and the total number of intervals covers the entire population. It is important to consider the number of intervals to be used. If too few intervals are used, too much data may be summarized and we may lose important characteristics; if too many intervals are used, we may not summarize enough. Each interval has a lower limit and an upper limit. Intervals must be all-inclusive and non-overlapping.
After intervals have been defined, you must tally the observations and assign each observation to its respective interval.
Once the data set has been tallied, you should count the number of observations that were placed in each interval. The actual number of observations in a given interval is called the absolute frequency, or simply the frequency.
g: Calculate relative frequencies, given a frequency distribution.